RBA 'wandering into dangerous territory' despite inflation slowdown
Economists, including the market's top monetary policy hawk, believe risks of a rate hike as soon as February remain despite new data suggesting a slowdown for inflation.
Australia's leading monetary policy hawk says the latest consumer inflation data has entrenched the need for the RBA to raise interest rates at its first opportunity, despite other economists keeping cool following a slowdown in the headline figure.
Although the 3.4% headline CPI increase in the 12 months to November was below the market consensus for 3.8%, EQ Economics managing director Warren Hogan told Capital Brief it shouldn’t be characterised as “weaker than expectations…it’s just not as bad as it could have potentially been”.
“The strategic situation is that the combination of these inflation numbers of the last six months combined with the fact that the economy is clearly in a recovery phase and still looks to be taking some solid momentum into 2026 means that the cash rate is not at the right level,” Hogan told Capital Brief.
He highlighted that most of the 11 sector groups that contribute to the consumer price index calculation show 12 month gains are above the RBA’s 2-3% headline inflation target band, demonstrating that inflationary pressures are broad based.
